Food tax increase could lower property tax for education, Utah senator says

SALT LAKE CITY — Utahns could have a more equal tax burden if the state shifts the way school districts collect property tax for construction projects, according to a state senator.

Currently, there are large disparities among school districts and charter schools, said Sen. Stuart Adams, R-Layton.

Some districts have a much larger tax base than others, and charter schools can't impose a property tax, he said during the Legislature's Revenue and Taxation Interim Committee meeting Wednesday.

Part of the tax collection for schools is already "equalized," Adams said. For example, income tax is collected by the state and distributed to school districts according to a pupil-based formula.

Adams said that if Utah increases the tax on food from 1.75 percent to 4.7 percent and the $533 million in revenue from that increase were distributed to school districts, property tax would go down for property owners in all 41 school districts.

For a home valued at $250,000, the annual decrease in property taxes would be between $64 in Daggett School District and $992 in Tooele School District, he said.

Obviously, that would mean the debate over sales tax on food would be resurrected, Adams said. But he said it's important that people can feel ownership of their homes, rather than feeling like they're renting their homes from the government.

"When you own something, you ought to own it," he said. "It shouldn't be continually taxed."

Kory Holdaway, government affairs director for the Utah Education Association, said the association doesn't have an opinion yet on Adams' proposal.

However, the association would be concerned if school districts that have a large tax base, such as Park City, Rich and Daggett, could have their tax base "robbed" in favor of districts with a smaller tax base, such as Tooele and Tintic, Holdaway said.

Some other legislators, such as Sen. John Valentine, R-Orem, and Sen. Howard Stephenson, R-Draper, praised Adams for taking on and trying to solve a tricky issue.

"What you're trying to do is long overdue," Stephenson said.

"Equalization will continue to be a problem until we take it on as a state," Adams said.

Adams doesn't have a bill written but expects to continue debating the issue through the Legislature's interim.

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